Limited Resource Farming

Overview
Declining Resources
Crop Profitability
Extension Tools

Changing
Times

Source: NPGCD Hydrology and Groundwater Resource 2011-2012 Publication

Source: NPGCD Hydrology and Groundwater Resource 2011-2012 Publication

Active Large
Production Wells
in the District
and Wells Added
Since 2006

Source: NPGCD Hydrology and Groundwater Resource

2011-2012 Publication

Irrigated Crop
Profitability

Estimated Costs and Returns for

2013 Primary Irrigated Crops in Texas High Plains

Production/Ac
Price
Grazing
Income

Corn

Corn
Silage

Cotton

225 bu

27 tons
$60

$6.50

Sorghum

Sorghum
Silage

Wheat

1100 lbs

75 cwt

21 tons

65 bu

$0.68 /
250

$10.60

$54

$8.70

$102.00

Gross Returns

$1462.50

$1620.00

$955.50

$795.00

$1134.00

$667.50

Ac-In Applied*

22

20

12

14

13

15

Variable Costs

$705.09

$831.72

$644.08

$405.25

$514.98

$394.26

Returns Above
VC

$757.40

$788.27

$311.41

$389.74

$619.01

$273.23

*Ac-In Priced at $4.40/mcf assuming 1 mcf = 1 ac-in

Estimated 2013 Corn returns over variable cost for various yields & prices

Yield:

170

200

225

240

bushels

Price
$/bu

Returns over Variable Costs ($)

5.50

251.91

404.91

532.41

620.91

738.91

6.00

336.91

504.91

644.91

740.91

686.91

6.50

421.91

604.91

757.41

860.91

998.91

7.00

506.91

704.91

869.91

980.91

1128.91

7.50

591.91

804.91

982.41

1100.91

1258.91

Assumes VC in budgets with variable harvest/hauling ($0.40/bu) and $4.40 natural gas

Estimated 2013 Cotton returns over variable cost or various yields & prices

Yield:

260

500

800

1100

1400

1700

lbs

Price
$ / lb

Returns over Variable Costs ($)

0.58

-264.39

-34.58

-6.08

221.74

451.55

0.63

-239.39

5.42

48.92

291.74

536.55

0.68

-214.39

45.42

103.92

361.74

621.55

0.73

-189.39

85.42

158.92

431.74

706.55

0.78

-164.39

125.42

213.92

501.74

791.55

Assumes VC in budgets with variable strip ($8.00/cwt), ginning ($2.75/cwt) & $4.40 natural gas

Estimated 2013 Sorghum returns over variable cost for various yields & prices

Yield:

45

60

75

90

105

cwt

Price
$/cwt

Returns over Variable Costs ($)

9.25

27.20

157.85

288.50

435.35

582.20

9.75

49.70

187.85

326.00

480.35

634.70

10.60

87.95

238.85

389.75

556.85

723.95

11.00

105.95

262.85

419.75

592.85

765.95

11.50

128.45

292.85

457.25

637.85

818.45

Assumes VC in budgets with variable harvest/hauling (54/cwt) and $4.40 natural gas

Estimated 2013 Wheat returns over variable cost for various yields
and prices
Yield:
Price
$/bu

45

55

65

75

85

bushels
Returns over Variable Costs ($)

7.25

-52.61

12.19

76.99

157.19

237.39

8.00

-18.86

53.44

125.74

213.44

301.14

8.70

12.64

91.94

171.24

265.94

360.64

9.25

37.39

122.19

206.99

307.19

407.39

9.75

59.89

149.69

239.49

344.69

449.89

Assumes VC in budgets with variable harvest/hauling (77/bu) and $4.40 natural gas

Estimated 2013 Corn Silage returns over variable cost for various yields & prices

Yield:

18

22

27

32

38

tons

Price
$/bu

Returns over Variable Costs ($)

45

43.53

194.53

383.28

644.53

958.03

52

169.53

348.53

572.28

868.53

1224.03

60

313.53

524.53

788.28

1124.53

1528.03

68

457.53

700.53

1004.28

1380.53

1832.03

75

583.53

854.53

1193.28

1604.53

2098.03

Assumes VC in budgets with variable harvest/hauling ($7.25/ton) and $4.40 natural gas

Estimated 2013 Sorghum Silage returns over variable cost for various yields &
prices

Yield:

12

16

21

26

30

tons

Price
$/cwt

Returns over Variable Costs ($)

40

30.27

161.27

325.02

561.27

750.27

46

102.27

257.27

451.02

717.27

930.27

54

198.27

385.27

619.02

925.27

1170.27

60

270.27

481.27

745.02

1081.27

1350.27

67

354.27

593.27

892.02

1263.27

1560.27

Assumes VC in budgets with variable harvest/hauling ($7.25/ton) and $4.40 natural gas

Irrigated Corn Costs of Production 2009-2013

$270
$260
$250
$240
$230
$220
$210
$200
$190
$180
$170
$160
$150
$140
$130
$120
$110
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
$-

Seed
(per bag)
Fertilizer
(per lb.)
Insecticide
(per acre)
Herbicide
(per acre)
Irrigation
Labor
Cash Rent
&Leases

Making the Decision

Utilize Extension Resources to Aid in Decision
Making
Drought Spreadsheets, Commodity Budgets,
Market Outlook Reports,
http://agecoext.tamu.edu/
Lease Spreadsheets
Limited Input Decision Aid
FARM Assistance (Like Us on Facebook)
QuickBooks Premier 2012

FARM Assistance Benefits

1. Where am I at today?
Comprehensive financial analysis of both
the whole farm operation and individual
farm units
2. How do I compare to other producers

in the area?
Database of Base Farm Analysis

FARM Assistance Benefits

3. Where am I likely going if I dont

change?
Up to 10 year projection period

4. What are the likely impacts of different

alternatives?

The Real Power of FARM Assist

Examining alternatives
Should I take on more land or change my lease
agreement?
Should I liquidate my cow herd or pay elevated grain
and hay prices?
Should I look at growing different crops?
Should I have my crop custom harvested or purchase
additional equipment?
How will the new Farm Bill affect my operation?

Projected Risk in Net Farm Income

for Base Scenario & Alternative 1
Base Scenario

Alternative 1

$1,000

$1,000

1400

1400

1300

1300

1200

1200

1100

1100

1000

1000

900

900

800

800

700

700

2001
5%

2004
25%

Mean

2007
75%

2010
95%

2001
5%

2004
25%

2007
Mean

75%

2010
95%

Thanks!